Petroleum of Mexico
The Petroleum of Mexico Corporation was a consortium of petroleum production companies formed in 1874 as part of a business deal negotiated between Monte Benedict and Bernard Kramer of Kramer Associates. Benedict and Kramer were both wealthy businessmen who had gained control of their state Continentalist Party organizations (in Jefferson and California, respectively). Benedict was a backer of Senate Majority Leader Oscar Barkley, while Kramer bankrolled Omar Kinkaid of California and James FitzHugh of Durango, and the two men had acted in concert to frustrate the reforms of President Arthur Conroy in the mid-1860s. The two had backed Kinkaid's successful bid for Continentalist presidential nominee and had funded his campaign in the 1869 Mexican elections. Kramer had sponsored a coup d'etat in Guatemala in March 1870 as part of his scheme to build an interoceanic canal there, and Benedict's petroleum engineers had followed Kramer's civil engineers into the country to search for oil, although they failed to find any. However, the knowledge Benedict's engineers gained searching for oil in Guatemala led them to believe that they would have better luck in the Gulf Coast areas of Durango and Chiapas. Their work paid off in 1880, when oil was discovered in Minatitlán, Chiapas and along the Gulf Coast between Reynosa and Tampico, Durango. The creation of Petroleum of Mexico was part of a deal to allow Benedict and fifteen other petroleum company heads to buy into Kramer Associates, Kramer's San Francisco-based company. Under the terms of the deal, Benedict and the other Jeffersonian oilmen would be allowed to purchase shares in K.A. for $200,000 each, which was the amount that Kramer and his 25 original partners had put up in 1865 when the company was established; the shares were worth considerably more. In return, K.A. would receive 20% of P.M.'s newly-issued stock. Another 29% of P.M. stock would be held by French bankers, while Benedict and his partners retained 51%. P.M. would be financed by a $200,000,000 bond sale, making it the largest corporation in the United States of Mexico in terms of assets, sales, and profits. Kramer was the more aggressive of the two men, manipulating events in the summer of 1881 to arrange a coup d'etat in Mexico City to place his man Benito Hermión in control of Mexico. The following year, Benedict retired as head of P.M. in favor of his nephew, Andrew Benedict. Kramer's own death in April 1882 brought his own successor, Diego Cortez y Catalán, to control of K.A. While Hermión pursued social reforms and launched invasions of Guatemala and New Granada, Andrew Benedict and Cortez increased their control over Mexico's economy. Hermión expropriated the property of French residents of the U.S.M., presumably including the shares of P.M. stock owned by Paris bankers, and awarded them to his own supporters. Sobel does not say which supporters, but it is likely that those supporters included Benedict himself and his business partners at P.M., allowing them to increase their control of the company. In the early 1890s, Cortez began to expand K.A.'s holdings beyond the U.S.M., financing companies in Belgium, the Congo, Argentina, and Manchuria. In 1892, Cortez bought out Petroleum of Mexico and merged it with K.A. Andrew Benedict presumably remained in control of the company's petroleum operations, and it is possible that one of the terms of the buyout was that Cortez choose a member of the Benedict family to succeed him as President of Kramer Associates. Cortez retired in 1904 in favor of Douglas Benedict, a grandson of Monte Benedict and thus either a son or nephew of Andrew. ---- Sobel's sources for the Petroleum of Mexico Corporation are Mortimer Dow's The Giants of Mexico: The Political Maneuverings of Kramer and Benedict in the Industrial Era (Mexico City, 1950); Frederick Montgomery's A Short History of the Mexican Petroleum Industry (London, 1951); Robert Taft's The Keystone: Petroleum of Mexico (Mexico City, 1955); Sobel's Men of Great Wealth: Operations of the Kramer-Benedict Combine (Melbourne, 1956); Thomas Mason's The Jefferson-California Axis of 1866-1876 (London, 1968); and Herbert Brinkerhoff's The Price of a Man: Oil and Produce in Mexican Politics (Mexico City, 1970). Category:Mexican businesses